Key Stock Levels to Watch After Strong Q3 Results

Shares of ITC erased gains after surging in Friday’s opening bids on BSE after strong third-quarter results. The in-hotel cigarette conglomerate’s consolidated net profit increased 15% to 4,056 crore in the third quarter. The stock was trading down 0.3% at 233 per share in early trades.

“ITC’s share price posted profits after a positive opening despite a very strong set of results. If we look at earnings, there is a clear beat on most metrics, but there is no change in the behavior of the stock price because whenever it is between 235 and 240, there is is witnessing selling pressure,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

There was no announcement of higher taxes on cigarette prices in Budget 2-2022, which analysts say is positive for the cigarette maker. However, there is always a risk of tax increases as this can be done at a TPS council meeting.

ITC’s cigarette segment achieved revenue of 6,958 crores in Q3FY22 vs. 6,091 crore in the same period last fiscal year. Meanwhile, the company’s other FMCG division achieved a turnover of 4,099 crore against 3,752 crore in the prior year quarter.

“Technically, 240-245 is a critical supply zone, but 100-DMA of 228 is immediate support level while 221 is the next important support level. 210 -200 acts as a strong base for a long time and only below that we can expect major weakness. On the upside, if it manages to trade decisively above the 245 level, we can expect a move towards the 265/300 levels,” Meena pointed out.

The opinions and recommendations made above are those of individual analysts or brokerage firms, and not of Mint.

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